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Motherhood wage penalty may affect pronatalist policies

If ignored, the motherhood wage penalty may
threaten the effectiveness of policies targeting fertility

Elevator pitch

The motherhood wage penalty denotes the
difference in wages between mothers and women without children that is not
explained by differences in human capital characteristics and labor market
experience. As part of the gender pay gap, the motherhood wage penalty can
represent a significant cost to being female and having children. If
ignored, it may undermine policy initiatives aiming to increase fertility
rates in post-socialist countries, such as the costly “baby bonus,” which is
a government payment to new parents to assist with the costs of
childrearing.

Key findings

Pros

The motherhood wage penalty can explain the ineffectiveness of
baby bonuses.

Policy measures to decrease the motherhood wage penalty may be
better alternatives than baby bonuses, which will also reduce
the gender pay gap.

Ongoing institutional changes in post-socialist countries are
likely to increase the motherhood wage penalty in the
future.

Cons

It
is complicated to compare estimates of the motherhood wage
penalty due to methodological differences.

Direct tests of the motherhood wage penalty’s effect on
fertility are not feasible.

More direct evidence is needed on the effectiveness of
alternative policies in reducing the motherhood wage
penalty.

Evidence on the role of institutional factors mostly comes from
developed and only a few post-socialist countries.

Author's main message

The motherhood wage penalty represents a
significant share of the gender pay gap and cannot be ignored when
considering policies targeted at women. The current strategy in many
post-socialist countries of offering so-called “baby bonuses” to increase
fertility is not working. Alternative policies aimed at reducing the
motherhood wage penalty may prove more effective: for example, publicly
provided childcare and moderate length parental leave combined with a
campaign to promote cultural support for maternal employment.